Forbes Fintech 50 2018: The Future Of Wall Street And Big Data

Being at the cutting edge of technology on Wall Street can mean billions of dollars in value created, or saved. In a dawning era of disruption, Wall Street-focused financial technology startups are helping the world's biggest banks and investors manage the flow of money better, safer and at a lower cost.

America's biggest lenders are using novel machine learning engines to sift through haystacks of information to uncover fraud and catch identity thieves, saving consumers money. In financial markets, new techniques of studying language are helping firms and exchanges spot market manipulation. Mega banks are using artificial intelligence to get a better, real time understanding of their market and operational risks, while new software platforms are altering how big firms collaborate internally and with the rest of the street.

The data age is also revealing new sources of investment alpha. Hedge funds are taking information gleaned from disparate places, for instance liquor license applications, FCC radio permits and satellite images, to research new investment ideas. The clever use of data is also helping to cut out costly middlemen. Upstart platforms are beginning to transform the way in which stocks and bonds are traded, mostly to the benefit of asset owners like 401(k) savers.

New additions to our list include Ayasdi, an artificial intelligence platform started by a team of Stanford PhD's, which helped
Citigroup pass the Federal Reserve's stress tests after a series of failures. Feedzai, founded by a former rocket scientist, is harnessing the power of data to detect fraud. Emerging data giants Enigma and Quandl are being used by the world's biggest hedge funds to parse hundreds of thousands of information sources for money making ideas.

Our list also includes holdovers that are increasingly entrenched on Wall Street. Nashville's Digital Reasoning pioneered algorithms that study language to help heavyweights like
Goldman Sachs and
Nasdaq uncover manipulators. Soon $1 trillion worth of assets will be stewarded on fintech unicorn Addepar. Stock exchange IEX my eventually redefine what it means to be a public company.

Here's who in capital markets and trading made our Fintech 50, in addition to their backers, customers and big developments.

Cloud-based software that allows financial advisors to track and analyze all of a client’s holdings and more easily bring new ones on board. Extended its range last year with acquisition of AltX, a data provider covering more than 17,000 hedge funds.

Its machine-learning software is able to extract meaning from everyday communications. Originally created for U.S. Army counter surveillance, it’s now used by top financial firms to screen their employees' e-mail and instant messages for misconduct and by Nasdaq to watch out for market manipulation.

Using natural language processing and artificial intelligence, organizes disparate public data coming from factories, shipping records, tax filings, and liquor licenses to create real world insights relied on by hedge funds and other investors. Lenders use it to identify money laundering suspects, insurers to assess their risks. Is Burger King growing its stores? Enigma tracks FCC radio licenses for drive thru radios to know exactly how many stores are opening or closing.

Bona Fides: The world’s broadest collection of public data has 100,000 datasets spanning 100 countries. Used by some of the world’s biggest quantitative hedge funds.

Stock exchange creates a speed bump to level the playing field between high-frequency traders and long-term investors. Recently won approval to list public companies and has partnered with Long-Term Stock Exchange to eventually host IPOs.

Uses huge historic database and machine learning to analyze how a specific event-- from a natural disaster to an election result-- might affect markets. Its economic mapping technology is now the backbone of more than a dozen unique index products.

A powerhouse in what’s being called “alternative data,” tracks everything from consumer spending online, to logistics data and internet interconnected devices. Tests thousands of obscure data sets to find those which provide insight into how a company is performing.

Bona fides: Its 250,000 users download 10 million data sets daily. Clients include seven of the world’s 10 biggest quant funds and 14 of the 15 largest banks in the world

Founder & CEO: Tammer Kamel, 46, former hedge fund risk head

Funding: $20 million from Nexus Venture Partners, August Capital and others